Bacaan agar tidak terlena ketika market sedang hijau. Bedakan antara investing dan gambling!!!

Commentators periodically attempt to parallel investing in the stock market with gambling. This comparison remains only remotely valid in the short-term and turns disastrously false over the long term. Exhibit 2 below shows that in the short-term, results vary widely for both investing and gambling.

Investor Nassim Taleb argues that the ratio of noise (portfolio variability) to non-noise (portfolio results) stays too high over short time increments to draw any sensible conclusions. Over long-time horizons, though, variability and results grow more obviously distinguishable. Taleb further notes that our emotions are not well designed to understand this point.

Investing is a net present value positive activity; otherwise, savers would not forgo current consumption in the expectation of greater future consumption. Inversely, with few exception gamblers engage in a net present value negative pursuit. The longer your time horizon in investing, the more likely you are to generate a positive return. The longer your time horizon in gambling, the more assured you are of a loss.

In recent decades the investment community focused more and more on outcomes—and increasingly on short-term outcomes. This focus likely reflects incentives in the investment management business.

As a result of the emphasis on short-term outcomes, most mutual fund managers do not establish an investment process that lends itself to long-term outcomes. The signatures of a quality long-term process include a focus on economic (versus accounting) value, low portfolio turnover, and relative portfolio concentration. An undue and incorrect focus on outcomes undermines the process.

In a nutshell, the best performers dwell on a process, try to capture attractive odds, and they assess their performance over the long term.

*Quoted from "Decision-Making for Investors" by Michael J. Mauboussin

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